The article in today’s Dominion confirms that the living wage is a potential win-win for both employees and employers. At least three small businesses are quoted as having introduced this into their working and have not had to increase the cost of their goods or services. Most of this has been down to substantial savings in absenteeism along with reduced recruitment and training costs. The benefits are endorsed by the Warehouse experience which links higher wages to staff retention and development
This practical experience runs completely counter to the recent Treasury Report that claims such a move will do little to alleviate poverty and would only add to employer costs. The Employers and Manufacturers Association spokesman makes the same claim when he comments that people ‘won’t like it when the cost of food or services rises because businesses are paying higher wages’. It is clearly much more important to follow the guidelines of theoretical calculations rather than the actual experience of those who have implemented it. Or is it just possible that giving more of the profits to the workers providing the goods or services might mean less for the senior managers and shareholders?
Those who have introduced better wages also acknowledge that the government benefit system has been subsidising their businesses with accommodation allowances and in-work tax credits. They obviously don’t want to be seen as ‘benefit bludgers’ that are so derided by some politicians.
The Baltimore experience of introducing a living wage throughout the city 1996 shows that it did not result in an increase in unemployment in the long term.
Add to that the fact that more money will end up in the local community in the hands of people who have been avoiding buying goods and services because they couldn’t afford them and will, if paid better, be able to support local businesses more.
The Treasury claim that such a move will not improve the lot of those in poverty seems very thin and makes you wonder what planet they are on.